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Framingham Used Car Dealer $925,000 Deceptive Sales Practice Judgment

Filed under: Business,Legal Notices by News Staff at 7:53 pm on November 20, 2019

[photo] MA Lemon Law CarFRAMINGHAM, MA - A used car dealership based in Framingham and its owner have agreed to a $925,000 judgment that includes restitution to consumers to resolve allegations that the business engaged in unfair and deceptive sales practices that violated Massachusetts consumer protection law.

According to the AG’s complaint, filed along with a consent judgment that was entered in Middlesex Superior Court last week, New England AutoMax Inc., AutoMax Preowned Inc., and Auto Max Inc. (AutoMax) and their owner Howard J. Wilner allegedly violated the Massachusetts Consumer Protection Act by misrepresenting important information about the condition, origin, and history of used cars it sold, selling add-on service contracts to consumers that did not cover the cars they were purchasing, falsifying down payments, and adding undisclosed fees onto car sales transactions.

“AutoMax and its owner purposely kept their customers in the dark about the condition and history of the cars they sold and charged customers illegal and unnecessary fees,” said AG Healey. “As a result of this settlement, customers who were misled by AutoMax will get money back and the company will stop its illegal practices.”

The AG’s Office began its investigation after receiving several complaints about unfair sales practices at AutoMax, including selling cars with invalid add-on warranties and padding sales with undisclosed fees or charges. The AG’s Office also alleges the company and its owner engaged in unfair and deceptive acts, including:

  • Failing to comply with mandatory requirements to disclose when cars were previously used as a lease, rental, or taxicab in advertisements and on purchase contracts.
  • Misrepresenting that cars manufactured for the Canadian market were covered by a manufacturer’s warranty and selling additional add-on service contracts at a cost of up to $3,000 that were invalid due to the foreign origin of the cars.
  • Adding hidden charges of $100 to $200 for customers seeking to trade in vehicles and payoff their existing loan as part of a sale.
  • Falsifying down payments on financing applications.
  • Charging document preparation fees for the preparation of documents that the company used to implement its deceptive schemes.

Under the terms of the consent judgment, AutoMax and Wilner will pay $750,000 in restitution for affected consumers and agreed to significant injunctive terms, including that the business comply with prior use disclosure regulations, disclose the foreign origin of the cars they sell and the implications on any warranty or add-on products, and ensure accuracy when completing consumer loan applications. The business is also prohibited from charging customers undisclosed or inflated fees. Additionally, the consent judgment includes a $175,000 suspended penalty for any violation of the settlement’s injunctive terms within three years.

Massachusetts consumer protection law requires used auto dealers to disclose prior use as a lease, rental, or taxicab on the purchase contract for all automobiles and in advertisements for automobiles. Used auto dealers must also disclose all material information that could impact a consumer’s decision to purchase a vehicle, and dealers have a duty to be transparent with consumers about the terms of a deal or sale.

The AG’s Office has handled several cases of unfair and deceptive practices in the auto industry in recent years. In December 2018, the AG’s Office settled a lawsuit with F&R Auto, a Westport used auto dealership that sold unsafe and defective vehicles to unsuspecting customers, and Sensible Auto Lending, a lender that facilitated deceptive sales at F&R Auto. The Office sued JD Byrider for misleading consumers and selling them high-priced, low-quality cars financed with high-cost loans, a package that consistently leads to repossession. The AG’s Office has also shut down a dealership, Auto Number One, for selling unsafe cars and obtained restitution and injunctive relief from another dealership, Auto Drive One, for routinely selling defective and unreliable cars.

Consumers who are eligible for restitution as part of this settlement will be contacted directly by the AG’s Office.

For tips or questions about the auto industry, consumers may call the Attorney General’s consumer hotline at 617-727-8400 or file a complaint with the office.

This matter was handled by Assistant Attorneys General Kimberly McDonald, Ann E. Lynch, and Lisa Dyen, and Deputy Chief Shennan Kavanagh, all of the AG’s Consumer Protection Division; Investigator Anthony Crespi of the AG’s Civil Investigations Division; and Senior Digital Evidence Analyst Brenna Casey of the AG’s Digital Evidence Lab.

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